MPEG was there in the Matrox video cards and some ATI cards in early 1990s. It may not be called MPEG4 but it was for video encoding/decoding.
Nope.
Another big bug with DirectX was that it was API-based and hardly any existing video cards at the time supported it's functions.
How is this a bug, exactly?
Besides, DirectX isn't API based. It is an API.